The social media industry is booming, and the decentralized platform Friend.tech has emerged.

The 2024 Global Social Market Report shows that the social media industry is experiencing significant expansion. Its market value is expected to increase from $219.06 billion in 2023 to $251.45 billion in 2024, with an annual growth rate of 14.8%. About 62.3% of the global population uses social media, averaging over two hours of usage time per day.

Decentralization social media ( DeSoc ) offers a new perspective by innovating the monetization methods for content creators and online relationship management. It promises to enhance privacy, security, and empower creators with complete control over their data and monetization.

With the evolution of Web3 technology, the concept of Decentralization social has begun to attract widespread attention in 2023. Friend.tech, as a blockchain-based Decentralization social network, has emerged to explore this burgeoning market. The platform contrasts sharply with other platforms by addressing common issues of centralized networks, such as user data ownership, limited privacy options, and content censorship risks.

In 2023, Friend.tech not only achieved significant growth, but its revenue scale is also comparable to some top protocols, providing creators with the opportunity for self-monetization.

This article will delve into the platform, examine its controversial token issuance, compare it with competitors, and assess its potential and associated risks for 2024.

Project Overview

Friend.tech is a decentralized social platform built on the Base chain, closely integrated with a certain well-known social platform to acquire users' Web2 identities. The platform allows each user to be tokenized, with their influence directly priced by the market.

As one of the most successful Web3 applications in the SocialFi field, Friend.tech has achieved the highest income to net deposit ratio in history, with over $2 million in revenue in the first month and net deposits of $33 million.

The core of this project is based on the concept of fan economy. Users need an invitation code and must deposit 0.01 ETH to start using it, which is the main currency for purchasing shares of other users within the platform. These shares represent a portion of the user's influence. After purchasing shares, investors can start one-on-one chats with the corresponding users. This mechanism allows users to connect directly with their favorite influencers. Additionally, these tokens, referred to as "keys" or "shares," are tradable, giving users the opportunity to profit from the increasing popularity of content creators.

For opinion leaders, they receive a 5% fee every time someone buys or sells their shares, providing a financial incentive. To increase income, opinion leaders need to enhance their share trading activities. An additional 5% goes to the platform, with a total fee of 10% charged for each related transaction.

Decentralization social media protocols garnered significant attention last year, but have recently experienced a decline. On-chain data shows that daily activity for Friend.tech has significantly decreased since it peaked on September 13, with 539,810 transactions recorded that day. Since then, interest in the platform has clearly waned.

However, despite this decline and some critical voices, there is still a heated discussion among Friend.tech users about a potential revival. This excitement stems from the anticipation of the upcoming airdrop, the announcement that users will have complete control over their tokens, and the impending release of version 2, all of which have received a positive response from the community.

Comparison of Friend Tech V1 and V2

Friend Tech V1 is an innovative decentralized social platform that connects crypto influencers with their followers. By creating their own shares, users can potentially earn income by buying and selling the "shares" of opinion leaders. This model has been particularly popular during bear markets, significantly boosting the platform's user base and activity. The platform generated approximately $13 million in fees from $130 million in trading volume, paying out around $6 million in revenue to users.

However, this model has drawbacks, mainly due to the high fees involved. Since both buying and selling shares incur a 10% fee, it is difficult to make a profit unless users sell at a price far above the purchase price. This high turnover demand leads to inconsistent user experiences, ultimately becoming a barrier for new users to join.

Friend Tech V2 will be released on March 3, 2024, introducing several new features and changes. Notably, users can now obtain $FRIEND tokens, marking a significant update. However, this release has faced criticism for the lack of clear information and guidance, particularly regarding new elements such as "clubs".

Clubs are the main new content in V2, serving as group spaces owned and managed by shareholders. Clubs have their own governance mechanism, including voting to elect a president to manage the club and appoint moderators. All transactions within the club use the $FRIEND token, with a fee of 1.5% for each transaction. This creates the possibility of introducing referral fees and more flexible trading terms among club members.

However, the implementation process and user experience are not smooth enough. Users feel confused about how to claim airdrops, join clubs, or even find established clubs because the platform does not provide clear instructions or interface prompts.

In summary, V1 focuses on rapid growth and revenue through high fees, while V2 aims to enhance user governance and interaction through a club, but faces challenges in execution and clarity that may impact its long-term viability.

Team, Basic Support and Strategic Cooperation

Friend.Tech was developed in August 2023 by two anonymous individuals with a controversial history in the crypto community. Community members pointed out that these developers were also involved in a failed NFT project. Further investigation revealed that one of the developers deleted several posts linking to this NFT project and had previously held an official position in a certain Discord community. These findings raised concerns about their reliability.

In August 2023, Friend.tech received seed funding from a well-known venture capital firm, although the specific amount was not disclosed, and collaborated with the company to create an online social interaction tool.

There are rumors that Friend.tech has completed a Series A financing round, with a valuation of 50 million USD. This round of financing includes token certification, suggesting the possibility of them eventually issuing their own token, which has now come to fruition.

Controversy

Friend.tech originated from a decentralized social media project called TweetDAO. The platform allows users to publish information from shared accounts by holding an NFT called "TweetDAO Egg." Although the project initially achieved viral success, it eventually faded away, leading to the closure of its main social accounts and website.

Afterwards, the developers launched Stealcam, a Web3 platform where users can mint and purchase hidden images as NFTs. However, due to the difficulty of maintaining profitability for creators, the developers eventually renamed Stealcam to Friend.tech. Friend.tech was launched in May 2023, aiming to attract Web3 influencers and creators seeking more effective ways to monetize content, adopting a supply and demand-driven economic model.

However, Friend.tech initially sparked controversy due to its vague privacy and data security issues. The platform requires users to download an application without an easily accessible privacy policy. This lack of transparency raised concerns among users regarding the handling of personal data, but this has since been partially addressed.

Moreover, the sustainability of the platform has also faced serious criticism. Initially, Friend.tech experienced rapid growth due to its influencer-centric strategy, but as early excitement faded, questions about its long-term viability have deepened. Critics point out that the platform's over-reliance on influencers is a key weakness. Without the active participation of key figures, the platform's value may decline.

This is precisely why the V2 update is undergoing a strategic shift from an influencer-centric model to one that focuses more on a broader community model. Nevertheless, questions remain regarding the level of participation of influential users and the actual value they bring when inactive.

Friend.tech is striving to differentiate itself and retain users in competition with multiple social platforms and other decentralized competitors.

On the positive side, Friend.tech now has its own token, creating opportunities for trading and speculation. The project has over 160,000 followers on a certain social platform and has received positive promotion from some influencers who encourage others to try the application. This promotion clearly has economic benefits for them, but it also indicates that the project has potential upside.

Currently, Friend.tech has a market capitalization of $184 million, which corresponds to a fully diluted valuation. Compared to some higher-valued DeFi protocols or meme coins, considering the project's fundamental profitability, $FRIEND is seen by many on-chain traders as an attractive risk-reward investment. The participation of well-known investors further enhances the project's credibility.

Competitive Analysis: Friend.tech vs Farcaster

Friend.tech initially gained strong support and was very successful by charging high fees and offering special club features. However, its popularity has declined, raising concerns about how to maintain long-term user interest. In contrast, Farcaster does not have its own token and uses a certain token widely accepted within the ecosystem. This approach has helped Farcaster build a loyal community similar to traditional internet forums, resulting in steady growth in user numbers and daily activity.

In summary, although Friend.tech has been highly profitable in its early stages, its volatile user data makes its future uncertain. Farcaster focuses on building a strong community through a certain token, which seems to promise more lasting success. This is because it has a loyal user base and various use cases within the ecosystem. As both platforms continue to evolve and respond to user needs, their success in the fiercely competitive SocialFi market will depend on adaptability.

Token Economics

$FRIEND token is the core of Friend.Tech V2, serving not only as a currency but also as a key to attracting community participation. The current market capitalization and fully diluted valuation are $185.26 million. A total of 92.63 million tokens were fully allocated to the community during the token generation event.

Token economics aims to promote participation; users can receive tokens by interacting with the platform - follow ten people to get 10%, and the remaining 90% requires joining a club. This ensures that token distribution supports active ecosystem participation.

$FRIEND can only be traded within the Friend.Tech system itself, which uses a local exchange feature with a 1.5% fee. This promotes liquidity and ensures that the platform benefits from fee revenue, but it also requires users to trust the stability of the platform.

The club feature on Friend.Tech is similar to a micro-government, allowing users to manage and customize their clubs, from setting names to economic parameters. This structure supports Decentralization governance, where club leaders and moderators are elected by shareholders, reflecting the transparency similar to a DAO.

Although it retains a user interface similar to V1, the introduction of the $FRIEND token and club adds a new level of engagement and monetization. Transactions within the club are subject to a 1.5% fee, which is distributed between liquidity providers and the platform, helping to maintain the financial health of the ecosystem and reward active participants.

Bullish Fundamental Factors

• Friend Tech has seen a surge in user adoption and activity following its recent airdrop and v2 upgrade.
• Despite its low market capitalization, especially compared to other projects and meme coins that generate less revenue, $FRIEND is attractive for on-chain traders in terms of potential price appreciation. Although it is currently not listed on major exchanges, investors should closely monitor any opportunities that may arise for listing on top exchanges, which would significantly enhance the token's accessibility.
• Friend.Tech is considered a certain